Accounting In Serbia before 24 July 2013

Before 24th July 2013, Accounting in Serbia was governed by Accounting and Auditing Law (”Off. Gazette of RS”, no. 46/2006, 111/2009 and 99/2011 - Dr. Law, below: Law).

Regulation of Accounting in Serbia include the following areas in the Law:

  • the mode of keeping the books of account,
  • recognition and valuation of assets and liabilities, income and expenditures,
  • compilation, displaying submission, disclosure and processing of annual financial statements,
  • conditions for and mode of auditing financial statements and internal auditing.


Assignment of accounting services in Serbia

Business entities in Serbia can independently perform accounting and bookkeeping tasks, through their employees performing accounting tasks delegated, and must by rulebook regulate the general degree, work experience and other requirements for these employees.
However, business entities in Serbia can by contract assign accounting services under provisions of the Law, to other registered business entity in Serbia which are registered for provision of accounting services, and which has employees entrusted with maintaining accounting records and preparing financial statements and meeting the requirements of by-laws (accounting agency, bookkeeping agency, company for accounting services, etc.).
This option does not apply to banks and other financial institutions, insurance companies, financial leasing providers, pension funds, companies for management of voluntary pension funds, investment funds, companies for management of investment funds, stock exchanges and broker-dealers companies.


Classification of Legal Entities in Serbia

Legal entities in Serbia are classified as small, medium and large-sized, depending on the average number of their employees, annual income and value of assets as on the date of compilation of financial statements in a financial year.

The legal entities which satisfy at least two of the following criteria on the financial statement compilation date shall be regarded as medium-sized legal entities:

1)      Average number of employees in the year for which the financial statement is presented, from 50 to 250;

2)      Total annual income, the RSD equivalent of € 2,500,000 to € 10,000,000;

3)      Average value of assets (at the beginning and end of the financial year), the RSD equivalent of € 1,000,000 to € 5,000,000.

The legal entities which have less than the lowest amounts set in the indicators for at least two of the criteria shall be classified as small-sized and the legal entities having higher amounts than the highest amounts set in the indicators for at least two of the mentioned criteria, shall be classified as large-sized legal entities.

The legal entities which for all three indicators determine the different parameters, under one indicator as small-sized, under second as medium-sized and under third as large-sized is classified as medium-sized.


The obligation to apply IAS and IFRS in Serbia

The obligation to apply IAS/IFRS in Serbia are prescribed for the following entities:

  • large-sized legal entity,
  • medium-sized legal entity,
  • legal entity which compiles consolidated financial statements pursuant to Law,
  • legal entity which issues securities through public offer or whose securities are traded on a regulated securities market.

Small-sized legal entity and entrepreneur in Serbia can opt for applying IAS/IFRS (no obligation)


The obligation of bookkeeping by double-entry systemin Serbia

In Serbia, the obligation of bookkeeping by double-entry system is prescribed for all legal persons.
Entrepreneurs, on the other side, may opt for double-entry system of bookkeeping.

However, the entrepreneurs – lump-sum taxpayer, are not obliged to keep books, but are obliged to keep books of turnover.


The obligation to audit the financial statements for business entities in Serbia

Audit of regular annual financial statements is obligatory for:

  • large-sized and medium-sized legal entities,
  • small-sized legal entities that issue securities through public offering or whose securities are traded on a regulated securities market,
  • holding legal entities that prepare consolidated financial statements.

Thus, the obligation of regular audits of financial statements is not obligatory for small-sized legal entities and entrepreneurs, but they may decide to audit the financial statements.